China Restricts Key Mineral Exports to Japan Amid Tensions

China has begun restricting the export of crucial minerals to Japan, a move that is disrupting Japanese industries and prompting calls for diplomatic engagement. The slowdown in shipments of materials like tungsten and magnets is particularly affecting Japanese companies, which are urging Prime Minister Fumio Kishida to seek a resolution with Beijing.

Since November, when Kishida stated that "a Taiwan contingency is a Japan contingency," China has implemented targeted export controls. While not as severe as the comprehensive restrictions seen in 2010, these measures are forcing Japanese firms to deplete existing inventories and search for alternative suppliers. Global tungsten supply has been significantly impacted, with China, the world's second-largest economy, halting nearly all tungsten exports in 2026. Magnet shipments also saw a sharp decline in May following China's imposition of export controls.

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If this situation continues, Japan will certainly need to engage in dialogue with the Chinese government. If we are shut out by China, it will definitely cause problems for Japanese manufacturing.

Japanese business leaders are expressing concern. Masayoshi Matsumoto, chairman of Sumitomo Electric Industries, a major tungsten buyer, stated that dialogue with the Chinese government is necessary if the situation persists, warning of problems for Japanese manufacturing if access is denied. Despite the growing pressure, sources indicate Kishida is reluctant to meet with Chinese President Xi Jinping at the upcoming APEC summit in November, partly due to dissatisfaction with what they describe as personal attacks from China.

Diplomatic channels between the two Asian giants have largely stalled. Japan's ambassador to China has repeatedly sought meetings with Chinese foreign ministry officials without success. This diplomatic freeze is linked to Kishida's stance on Taiwan and China's subsequent trade restrictions on various goods. While China's Ministry of Foreign Affairs and Japan's Ministry of Foreign Affairs have not commented on the specific export restrictions, Japan has joined G7 allies in pledging to reduce its reliance on any single country for rare earth minerals by 2030. Japan is exploring recycling initiatives, price floors, and trade measures to address immediate supply gaps while working towards greater self-sufficiency.

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Japan still wishes to engage in dialogue with China, and such dialogues are ongoing at various levels.